In The Asian session on Wednesday, the DOLLAR index was little changed at around 96.40. Spot gold maintained its upward trend and was trading near $1,716 an ounce. Investors will be focused on the Fed’s decision during the session, and while the fed is widely expected to leave policy unchanged, the post-meeting statement and comments by Fed Chairman Colin Powell could spark market volatility. The U.S. CPI is also expected to influence the market on Wednesday evening, Beijing time. On the global front, the number of confirmed cases of COVID-19 has exceeded 7.31 million globally and the number of confirmed cases in the US has exceeded 2.04 million.
Spot gold rose nearly 1 percent on Tuesday in anticipation of dovish monetary policy from the U.S. Federal Reserve. Spot gold rose as high as $1,720.60 an ounce on Tuesday, closing at $1,714.13, up $16.51, or 0.97 percent.
The FEDERAL Open Market Committee will announce its interest rate decision at 02:00 Beijing time on Thursday. Federal Reserve Chairman Colin Powell will hold a press conference at 02:30 Beijing time on Thursday. Markets expect the Fed to keep interest rates near zero.
To cushion the impact of the coronavirus pandemic, the Federal Reserve injected massive stimulus and cut interest rates to near zero. The Fed will need to weigh signs that the impact on the economy has passed its worst against evidence that the virus itself is not under control.
Federal Reserve Chairman Colin Powell, in his final speech before a quiet period at the Central bank, said a surge in coronavirus infections in the United States could hamper the economy’s recovery from the deep recession caused by the pandemic, although he reiterated the Central bank’s commitment to continue to act to combat the crisis.
Separately, the Fed will release its first set of economic forecasts since December. Officials abandoned their forecasts for March, saying the outlook was too uncertain to make useful predictions.
Westpac said the Fed had been so successful in boosting sentiment so far that it was expected to keep rates on hold at the meeting. Investors will be keenly interested in the bitmap of interest rate forecasts that FOMC members have not published since December 2019, and in any discussion of measures such as yield curve control.
If the Fed remains dovish, the dollar could take a hit and gold could rise further, analysts said.
Td said it expected the tone of this week’s FOMC meeting to “remain dovish”, which could revive investor interest in gold. The underlying themes driving gold purchases have not changed and central Banks remain committed to maintaining current monetary policy for the foreseeable future.
Daniel Ghali, commodities strategist at TD Securities, said: “The Fed will continue its dovish policy and they will continue to hold down real interest rates, which have been the main driver of gold buying over the past few months.” He added that the macro impact would continue to support gold prices.
“The prospect of further Fed stimulus has been the number one factor supporting gold prices over the past few days,” said David Meger, head of metals trading at High Ridge Futures.
George Gero, managing director of wealth management at Royal Bank of Canada, said the market also continued to expect dovish monetary policy in the United States ahead of this week’s FOMC meeting. In the long term, Gero said, he expects gold to reach $1,800 an ounce.
According to Economies.com, gold has managed to break through $1,710.00 an ounce and is holding above that level, reinforcing expectations of a continued major bullish trend. Gold’s next major target is $1,764.00 an ounce.
Economies.com added that gold’s continued bullish trend was conditional on it staying above $1,691.10 an ounce.
Watch out for another sell-off in the dollar triggered by the Fed’s decision
The dollar’s recent retreat has been sustained as optimism about a post-coronavirus recovery drives risk appetite higher, and could fall further if the Fed’s dovish rhetoric comes in. On Tuesday, the dollar index.DXY closed down 0.35 percent at 96.37, having hit an intraday low of 96.23.
“While we see some recent momentum against the dollar taking a breather, we are not prepared to buy the dollar until we hear from Powell and his colleagues,” Wells Fargo said in a research note.
Morgan Stanley said in a research note on Saturday that this week’s Fed meeting is expected to add headwinds to the dollar, making further declines inevitable.
Morgan Stanley analysts said the bank expected the Fed to leave rates unchanged at this week’s meeting, while also watering down guidance on how long rates would stay low. Fed Chairman Colin Powell is expected to remain concerned about the economic outlook.
The bank’s analysts added: “Currency markets are already creating a lot of headwinds for the dollar as we approach the Fed’s June meeting. However, we don’t expect much to happen at this meeting. The overall tone should be slightly dovish, so the market should expect low rates to last longer. Given the recent weakness in the DOLLAR, coupled with such dovish expectations, we believe the DOLLAR index could fall further.”
“The focus this week will be the Fed meeting, and we expect the tone to remain dovish as central Banks remain committed to maintaining their monetary support for the foreseeable future,” Bart Melek, strategist at TD Securities, wrote in a research note.
Cibc said the Fed’s rate statement was likely to be more dovish than widely expected.
, however, some analysts warn that due to the latest U.S. jobs report is very strong, and enhance the people’s confidence in the economic recovery, has prompted some exchange abandon the bet on a negative interest rates, the fed’s decision this week could strengthen refuse negative signals, even hawkish signals may release, if so, the dollar rebound is expected to get the power, and a blow to gold.
“One of the risks in gold trading this week is that the Fed stressed that the economy is not as bad as feared and hinted at easing stimulus measures, which would push Treasury yields higher and curb short-term safe-haven demand,” said Adam Button, managing director at ForexLive in New York.
In addition to the Fed’s decision, investors will also be looking at THE U.S. consumer price index for May, one of the most closely watched economic data in the market after the jobs data.
The US consumer Price Index (CPI) is one of the important indicators to measure the US inflation, and the Fed USES this data to adjust monetary policy, thus affecting the trend of the us dollar exchange rate in the short term.
The U.S. CPI for May will be released at 20:30 Beijing time on Wednesday. U.S. consumer prices are expected to rise at a 0.3 percent annualized rate in May after rising 1.3 percent in May, according to a media survey.
If THE U.S. CPI comes in higher than expected, it could further depress the Fed’s negative interest rate expectations, which would give the dollar a chance to rebound, analysts said.
Novel Coronavirus infections worldwide have hit 7.31 million with a cumulative total of more than 2.04 million confirmed cases in the U.S.
According to the latest statistics, the cumulative number of confirmed cases of COVID-19 globally has exceeded 7.31 million. In addition to the United States, Brazil, Russia, the United Kingdom, Spain, India, Italy and Peru have more than 200,000 confirmed cases. The cumulative number of confirmed cases in the United States has surpassed 2.04 million.
The number of countries with more than 100,000 confirmed cases globally is 16, ranking most or least in the United States, Brazil, Russia, United Kingdom, Spain, India, Italy, Peru, Germany, Iran, Turkey, France, Chile, Mexico, Saudi Arabia and Pakistan.
According to world real-time statistics, as of 9:39 am, June 10, The total number of confirmed cases of COVID-19 worldwide has exceeded 7.31 million, reaching 7,316,944, and the total number of deaths has exceeded 413,000, reaching 413,627. The United States has the most cumulative confirmed cases of COVID-19 globally, with more than 2.04 million cases to 2,045,549, and more than 114,000 cumulative deaths to 11,148.
Protests over the death of an African-American man, George Floyd, by a white police officer in Minnesota have spread across the US for days, with riots and violent clashes. American health experts have repeatedly warned that mass demonstrations during an epidemic could create potentially clustered cases.
Major epidemic in overseas countries, Worldometers world real-time statistics, as of 9 PM Beijing time on June 10, 39 points, Brazil’s new plan confirmed 742084 cases of lung, Russia has confirmed 485253 cases, the diagnosis of 289140 cases, accumulative total of 289046 cases of the patients in Spain, India has confirmed 276146 cases, Italy has confirmed 235561 cases, confirmed 203736 cases of Peru, Germany has confirmed 186516 cases, Iran has confirmed 175927 cases, Turkey has confirmed 172114 cases, France has confirmed 154,591 cases, Chile 142,759, Mexico 124,301, Saudi Arabia 108,571, Pakistan 108,317 and Canada 96,653.
As for the epidemic situation in China, according to the national Health Commission on Wednesday, from 0:00 to 24:00 on June 9, 31 provinces (autonomous regions and municipalities directly under the Central Government) and the Xinjiang Production and Construction Corps reported three new confirmed cases, all imported from abroad (two in Inner Mongolia and one in Tianjin). No new deaths; One new suspected case was imported from abroad (1 case in Shanghai).
As of 24:00 on June 9, 31 provinces (autonomous regions and municipalities directly under the Central Government) and the Xinjiang Production and Construction Corps have reported 55 confirmed cases (no serious cases), 78,357 cured and discharged cases, 4,634 deaths, 83,046 confirmed cases and 2 suspected cases. A total of 747,680 close contacts have been traced and 2,892 close contacts are still under medical observation.
On 8 June local time, WHO held a regular press conference on COVID-19. Who Director-General Tedros Adhanom Ghebrest says the global coVID-19 epidemic is worsening. “There are positive signs emerging in some countries where the biggest threat now is complacency,” Tedros said. Who continues to urge countries to closely monitor the development of the outbreak, especially as some countries begin to resume holding various mass gatherings, to ensure that the outbreak does not rebound.
In response to the recent global campaign against racism, WHO encourages safe protests everywhere, advising participants to keep at least one metre away from others as far as possible, to pay attention to cleaning their hands, covering their mouth and nose when coughing, and wearing masks.
The world bank on June 8, the latest, according to the global economic outlook, affected by the outbreak of COVID – 19, huge impact on the global economy, predicting the global economy will shrink by 5.2% this year, the world bank forecast this year, the global economy into the worst recession since world war ii, per capita output down the economies of scale will reach the highest level since 1870.